What happens when a massive privatised contracts company goes belly up?

Answer: our government looks for ways to use OUR money to bail it out.

Carillion (formerly more plainly called Tarmac) owes £1.5 billion.

Why? Because it underbid for contracts and then racked up massive losses even when offering minimal services.

Why does it matter? Because it is a major contractor for the HS2 rail line and it also maintains 50,000 homes for the Ministry of Defence, manages nearly 900 schools, has NHS contracts and also manages highways and prisons and works with National Grid. It employs 43,000 people worldwide.

Imagine if Jeremy Corbyn had suggested it should be nationalised!

http://www.bbc.co.uk/news/business-42656879

and much more information here:
https://www.theguardian.com/commentisfree/2018/jan/12/building-company-carillion-collapse-schools-roads-hospitals-hs2-taxpayers-bill

2 thoughts on “What happens when a massive privatised contracts company goes belly up?

  1. I have worked in privatised utilities, and on both sides of outsourcing contracts in the private sector, and in central government and I have yet to see one that was beneficial. Indeed, as far as I can tell, the practical realities of such deals are such that long term benefits are at best highly unlikely if not impossible. So I am not surprised by this.

    To restate what I have said before, I challenge anyone to give me any example of a privatised or outsourced public service where the privatisation or outsourcing has been beneficial to the public in the long term.

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  2. There are other examples to prove that privatisation is not the panacea that Conservatives would have us believe – take East Coast Trains, for example…

    https://www.theguardian.com/uk-news/2017/nov/29/east-coast-rail-franchise-terminated-three-years-early-virgin-trains

    And then there’s Virgin Care:

    https://www.ft.com/content/297e7714-089f-11e7-97d1-5e720a26771b
    http://www.independent.co.uk/news/health/nhs-richard-branson-virgin-care-legal-settlement-tendering-contract-a8080961.html

    According to Wikipedia: Branson’s business empire is owned by a complicated series of offshore trusts and companies. The Sunday Times stated that his wealth is calculated at £3 billion; if he were to retire to his Caribbean island and liquidate all of this, he would pay relatively little in tax. Branson has been criticised for his business strategy, and has been accused of being a carpetbagger. Branson responded that he is living on Necker for health rather than tax reasons.

    Hopefully a lot more people are beginning to join the dots…

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